Symantec coughs up $62.5m for virus scan patent

Symantec pays for virus scanning patent

By
Kieren McCarthy
| Aug 19, 2003

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Symantec, manufacturer of the famous Norton anti-virus software, has paid $62.5 million to small software company Hilgraeve for infringing its virus scanning patent - six years after Hilgraeve took out legal action.

Under the deal, Symantec now has unlimited access to Hilgraeve patents in perpetuity. The patent that the fuss was over (No. 5,319,776) concerned the in-transit scanning for virus signatures in data and then, if found, inhibiting the virus.

The patent is vital, especially in the Internet area where large files are downloaded by millions at high speeds. However Hilgraeve - which is best known for designing HyperTerminal many moons ago - says most of the development work was done in 1989 with very early IBM virus data. Hilgraeve was awarded a patent in 1994 and offered to license its technology to Symantec and McAfee in 1996.

Both companies refused to license the patent but Hilgraeve felt their products were infringing its property so sued both on 16 September 1997. Hilgraeve initially lost its court battle against Symantec after the Michigan District Court decided that Symantec's software stored the file on a hard disk before scanning it for viruses whereas Hilgraeve's patent covered only scanning in transit.

However a the Court of Appeals overturned this decision in September 2001, saying that Symantec's definition of storage was not sufficiently strong enough. Instead, it said the anti-virus software would get to any infected downloaded file before it could be used by any other part of the computer (it would be a pretty big security breach were this not the case), and as such, it did infringe the trademark.

A second claim that Symantec had use of the patent through the acquisition of another company, Delrina, in July 1995, was discarded.

McAfee settled with Hilgraeve in October 2001 for an undisclosed sum, gaining access to all its patents. Quite what the delay with Symantec was, we can't be sure, but it seems to have cost Symantec a pretty penny - $65 million in fact.

In the end, it had little choice, especially as the patent expires June 2011. Symantec CEO John W. Thompson admitted as much in a press release: "This is a patent that is fundamental to several security technology defenses, including antivirus technologies, and it is an essential part of providing comprehensive protection against the growing number of threats. In-transit scanning of multiple security signatures is a must-have component of an effective security solution and by purchasing this patent we are making sure that Symantec's products, technologies and customers are protected today and in the future."

The pay-out will give Symantec a jolt in the ribs, which is presumably why the company was forced to admit its expensive misjudgment. Net income will fall by $9.5 million this quarter said Thompson.